This week in disruptive tech—July 18, 2016

A roundup of news and perspective on disruptive technology from around the world. In this issue: Pokémon Go, the shift from print to digital media, bitcoins and the maturing of digital currency, and more

Pokémon Go and rapid success

Since its launch on July 6 in the US and Australia, and more recently in Canada and Europe, Pokémon Go, the location-based augmented reality (AR) mobile game, has seen unprecedented growth. It has overtaken Twitter in average daily users and Facebook, WhatsApp and Snapchat in average time spent. Its rapid growth underlines another seemingly contradictory demand of the world getting disrupted by technology: the need for patience. The chart tends to be flat, before it turns into a hockey stick.

The breathtaking popularity of Pokémon Go was many years in the making. It built on the enduring appeal of a game that was launched 20 years ago and on the layers of technology that developed over years. Pokémon Go couldn’t have happened if Niantic Labs hadn't made Ingress earlier, which in turn couldn't have happened without Google Maps. (Niantic Labs jointly developed Pokémon Go with Pokemon Company, an affiliate of the Kyoto, Japan-based Nintendo.)

John Hanke, chief executive of Niantic Labs, is no newbie who happened to stumble upon the idea. He got his MBA from the Haas School of Business at the University of California, Berkeley, in 1996—the same year the original Pokémon was launched. Even while he was a student there, he co-founded a company that built one of the earliest social, online games. Eventually, he started Keyhole, which brought high-end geospatial data visualization to apps. Keyhole was acquired by Google in 2004, and Hanke was in charge of Google Earth, Maps, and Street View. Niantic Labs was in fact a part of Google till last year. Pokémon Go is not a result of an epiphany—a mathematician’s intuition, but that of experience—a historian’s accumulated knowledge. Its overnight success took time. As American film producer Samuel Goldwyn, that purveyor of modern wisdom, once said, “Give me a couple of years and I will make that actress an overnight success.”

As in Hollywood, overnight success need not mean sustained stardom. It’s too early to say that Pokémon Go will remain popular and sticky. But it’s making money—about a million dollars a day—and the stock market value of Nintendo has expanded by $17 billion in a week. It has resulted in higher footfalls for museums, parks and public places as people flocked there to get a better chance of capturing the Pokemons, the digital creatures they are supposed to capture in the game.

The game is simple enough to get on to. Download the app, turn your GPS and camera on, and it overlays a digital layer on top of the real world (hence the term augmented reality). The digital layer has PokeStops and Poke Gyms, usually in places of interest, with Pokemons that can be caught using Poke Balls. Small businesses—malls, restaurants, cafes, retailers—can attract them in by offering Lures—one among a range of in-app purchases.

It could have a positive ripple effect on competitors too, by expanding the market, and making AR more acceptable. Microsoft CEO Satya Nadella said it could help his virtual reality business.

But there have also been questions about safety with reports of teenagers being shot at in Florida because they were mistaken for thieves while they were engrossed playing the game; and privacy, with all the data that Pokémon Go can collect about its users. It has already seen an attack by a hacking group that took down its servers.

To view Pokémon Go only in terms of technology or business would diminish what the game says about our society and culture. It has already kicked up debates on bigger issues such as capitalism and man-machine relationships. Is this model—where a person’s entertainment budget is captured by a big California/Kyoto-based company and not by a local business—the right one for a society (here and here)? Are we getting closer to the dystopia painted by movies like The Matrix and Her, which blurred the line between what we traditionally thought of as reality and illusion? Are we “beginning our migration towards a networked sensorium” as The Guardian put it?

Even if Pokémon Go loses its charm over the next few months, these questions will remain.

Technology and culture

The big questions about how technology will impact society and the way we look at the world are not restricted to virtual and augmented reality devices and algorithms. They apply even to print technology—in fact, any technology that can take information to a large number of people. Because, technology both shapes and is shaped by the underlying culture. In a thought provoking piece on media in the digital age, Katherine Viner, The Guadian’s editor, argues that the shift from print to digital media was never just about technology, but also about the underpinning digital culture.

Bitcoin and incentives

Meanwhile the appeal of bitcoin seems to be only increasing.

Part of it is because of inbuilt incentives. The digital currency works because every transaction is recorded and verified by a community of so-called ‘miners’. These miners verify the transactions and keep the ledger in order because that’s the way to mine or earn bitcoins.

In the beginning, they got 50 bitcoins for mining one block (ledger of transaction data). In 2012, the rewards were halved to 25 bitcoins, and on 9 July 2016, it halved again to 12.5 bitcoins.

The rewards will diminish by half after mining of every 210,000 blocks. It was designed that way to keep a check on the number of bitcoins that get released, as a curb on inflation.

However, the mining itself is unlikely to stop because the value of each bitcoin has been going up. At the time of the last rewards cut—in November 2012—a bitcoin was trading at $12. Now the value of a bitcoin is around $685. In fact, it rose 50% in the last six months.

Some expected that the cutting down of incentives might make mining unprofitable and endanger the process of verification. In fact, prices dropped, but quickly recovered. It’s a sign that digital currency is maturing—fast.

The dynamic forces shaping AI: Beau Cronin, head of data at 21 Inc, breaks up artificial intelligence into data, hardware, software and talent and explains how each of these will shape its progress in the coming years.

The business implications of machine learning: Drew Breunig, of PlaceIQ, gives an overview of machine learning from a business perspective. One of his key arguments is that big players such as Google and Facebook will continue to dominate the space. However, that doesn’t mean challengers have no way of breaking into their castle.

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NS Ramnath is a senior writer and part of the core team at Founding Fuel, and co-author of the book, The Aadhaar Effect. His main interests lie in technology, business, society, and how they interact and influence each other. He writes a regular column on disruptive technologies, and takes regular stock of key news and perspectives from across the world.

Ram, as everybody calls him, experiments with newer story-telling formats, tailored for the smartphone and social media as well, the outcomes of which he shares with everybody on the team. It then becomes part of a knowledge repository at Founding Fuel and is continuously used to implement and experiment with content formats across all platforms.

He is also involved with data analysis and visualisation at a startup, How India Lives.

Prior to Founding Fuel, Ramnath was with Forbes India and Economic Times as a business journalist. He has also written for The Hindu, Quartz and Scroll. He has degrees in economics and financial management from Sri Sathya Sai Institute of Higher Learning.